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Photo Credit: Sergei Belski-USA TODAY Sports

Leaked Flames offer proposed City of Calgary pay for 52% of the new arena

Earlier this week, Calgary City Council voted to reveal details of their side of the arena negotiations with the Calgary Flames. The Flames’ side of things are reportedly covered by a confidentiality agreement, but sources have seemingly leaked quite a bit of the nuts and bolts to the Calgary Herald‘s city hall columnist Don Braid.

Reportedly – and grain of salt on this, obviously – the Flames desired the City to pay for 52% of the $550 million needed to build the new barn. That would mean that the taxpayers would shell out $286 million for the building, with the Flames paying the remaining $264 million.

Braid spoke with Ken King, who had a fairly straightforward rationale for the reported share of costs for the hockey club:

But Flames CEO Ken King says nobody should be surprised the Flames want both parties to pay roughly equal share. “That’s basically what we proposed with CalgaryNEXT — 50-50. It’s very fair.

“So, it should come as no surprise that any model we could put forward in Victoria Park is similar to the one put forward in CalgaryNEXT.”

For those just joining us, the proposed cost structure from the $890 million CalgaryNEXT proposal was:

  • $200 million from the Flames
  • $200 million from the City (from the money ear-marked for the fieldhouse)
  • $250 million from a ticket tax
  • $240 million from a Community Revitalization Levy

If the Flames were going to be fronting the money from the ticket tax, then they would have been putting up half the money. But also bear in mind that many of the problems critics – both in and out of City Hall – had regarding the proposal involved the financial structure; such as the City didn’t have the money for a fieldhouse to begin with, and it was fuzzy whether or not the West Village could qualify for a CRL.

But Braid’s detailing of the Flames’ proposal gets better.

Sources also say the sports company at one point asked for veto power over development in Victoria Park. Any projects would have to match its own vision for the area.

The request, which apparently came in a letter rather than as part of a formal offer, was made in February. Sources say that may have been early bluster, perhaps related to testy relations between the Flames and the Stampede.

According to Braid, it’s unclear who would own the building or whether the team would pay any rent. Presently, the City of Calgary officially owns the Saddledome and the Flames lease it from them (via the non-profit Saddledome Foundation, which distributes the funds to three local charities). As such, the ‘Dome generates no property tax revenue for the City.

Here’s a comparison of the three cost structures we’ve seen since this saga began in August 2015:

City’s
proposal
Flames’
proposal
Calgary
NEXT
Total Cost $550 million $550 million $890 million
From City $183 million $286 million $200 million
From Flames $183 million $284 million $200 million
Ticket Tax $183 million $250 million
CRL $240 million

Note: The City’s proposal reportedly included their contribution being a loan, while CalgaryNEXT included the construction of a fieldhouse/football stadium as well as an arena.

Once again, take these details with a grain of salt. It’s a leak, after all. But Braid’s a veteran reporter who probably wouldn’t go out on a limb like this – or go to King for comment – if he wasn’t confident in his sources.

    • Purple Hazze

      The ticket tax funding option is involved in offers on both sides, the difference being, the Flames are counting it as part of their 50% contribution, the city’s offer doesn’t count it as part of the Flames contribution but rather they consider it as part of a “user” based contribution. This breakdown seems to be one of the sticking points between the two sides.

  • class1div1

    Who makes up the Stampede board and what is there affiliation with city hall?.What influence do they have here and how do they profit ?Does there future success hinge on the Flames relocating in East village?

    • PrairieStew

      This is a very good point. One of the results of the downtown arena in Edmonton is the slow strangling death of Northlands Park. What happens with the Saddledome moving forward regardless of where the new arena is will have critical importance for the Stampede. If the new arena does get built in Vic Park, then one could expect some significant changes for the Dome. One of the proposals for Northlands Coliseum was from Hockey Canada to create a multi use/multi surface facility. The City of Edmonton has not committed to anything; other than Northlands will close soon ; based on reports that renovation is more expensive than new construction….

      • McRib

        Why would the Stampede want the Saddledome taking up space? They may use the Saddledome for a few years, but after that it will be torn down, just like what is being purposed as recently as yesterday with Northlands. No one wants old in today’s society as much as that mentality bothers me (I’m pained walking down 17th Ave everyday seeing unique old building torn down for generic large glass boxes that block out the sun).

        That’s the major flaw which makes these arenas a mediocre investments for taxpayers. They cost $600+ million to build and they barely last 20-25 years now in most cases. It takes 10-15 years to pay them off then, just as they start to turn a profit they’re torn down. Because Gary Betman of the world are at your doorstep suggesting the franchise is no longer feasible without a new shiny toy building.

        • OilFarmer

          I think one big difference between Calgary and Edmonton as well is that Edmonton’s downtown was such a mess and POS that using tax money to revitalize the area was viable. Calgary’s downtown car isn’t the same heaping pile of garbage that Edmonton’s was before the rink project.

      • class1div1

        Exactly.Just trying to figure out why we arent hearing anything in regards to the politics of the Stampede board who obviously have much to gain or lose here.No one talks about them.Its like they are a secret society.

    • Bottsy777

      The Stampede board is a “not for profit” venture. It manages the operation of the City owned lands comprising the Stampede Grounds. A volunteer board is elected/appointed. Our mayor is appointed for the duration of his/her term. 2 Council-persons get appointed with 2 or 3 year terms. The Province gets an appointed slot (usually an MLA) and so do the Feds (Their spot is currently vacant). This board represents the city in protecting their interests essentially…. hardly a “non-partial” entity in this endeavour. This is also why the City was against the West Village option out of the hop – it alienates their investment in the Victoria Park area…

        • Kevin R

          I am also curious why all this contamination in the West end hasn’t been discussed more in light of all the huge taxes & funding toward cleaning up the environment & global warming. How serious is this contamination because I feel pretty foolish living in Calgary all my life & not really making a point of knowing what the threat it is to our environment. Sounds like a whole new issue altogether, that no one wants to pay to clean up & deal with.

  • McRib

    “Sources also say the sports company at one point asked for veto power over development in Victoria Park.”

    Why? Victoria Park is the best location that anyone has mentioned or are we talking about how the Flames would have veto power with other projects around the rink if it was in Victoria Park? Just saying, West Village is NOT where I want this rink to go, as it should be relatively close to the Stampede groups for big act concerts during the Stampede itself to tie those in.

    One thing that sounds fishy about the asking for veto power in Victoria Park is the Flames (as has cleverly been brought up here in the comment section the last few days) never did anything to revitalize the area around the Saddledome. I don’t know if that was because of the proximity to the Stampede grounds or not, but I am not buying that the Flames are going to spend a ton of effort like Edmonton has to try and revitalize around the area around the rink (although for Katz in Edmonton it’s been self serving as I believe he is involved with the apartment complexes nearby).

    Once again, I also don’t want anything to do with a mixed use stadium, I hope that is DEAD, I go to 50-60 Flames, Hitmen, Roughneck games and numerous concert a year, I don’t want to be walking around the massive footprint of the football stadium in the dead of winter, I also don’t want the football stadium taking up expensive urban prime land that could be used in creating a vibrant community around the arena (although I’m not convinced that’s what the Flames want, considering this veto request). The Stampeders play what eight home games a year, there is absolutely no need for the stadium to be downtown and it should be near the U of C so the Dino’s can use it.

    I hated Calgary Next purposely and to be honest all of this really scares me. The Flames can’t even settle in finding new jerseys the fans like, considering as much I have a hard time thinking I am going to like the arena location, design.

    • McRib

      WHEN ARE WE GETTING AN EDIT BUTTOM? It was promised months ago. I can’t tell you how many times I accidentally hit the “post comment” before I am even down writing my comment. On my phone it’s like a CM away from the text box.

    • PrairieStew

      I understand your opposition to the West village concept – the proximity to Stampede park has definite advantages. I think what CalgaryNext was doing was trying to duplicate the “renewal” that Edmonton has experienced and capitalize on the Community Revitalization Levy. By using this tax method – the general taxpayer does not have to pay anything – only the new businesses that result from the development ( and the ticket tax). Can the Vic Park model also use the CRL method ? I’m not sure – pretty hard to add a surtax to established businesses. I’m far more in favour of a funding model that includes a ticket tax and a CRL than general taxes.
      The other downside of West Village is the unknown costs on the creosote cleanup. This has to be done eventually, and frankly it is never going to get cheaper to do. Trucking away contaminated dirt and trucking in new stuff is going to cost more 10 or 20 years from now, why not take advantage of this opportunity to clean up and fill out that area and create an extended city core ?

  • McRib

    “But Flames CEO Ken King says nobody should be surprised the Flames want both parties to pay roughly equal share. “That’s basically what we proposed with CalgaryNEXT — 50-50. It’s very fair”

    I could kind of live with this at a lesser percentage for the City (25% would be enough considering they’re also doing a prime land donation, municipal works tie ins, etc) ONLY AS LONG AS the Flames are willing to split some of the revenues with the City on things like Parking, Concerts, Naming Rights, etc. The major problem though is most professional sports teams are always unwilling to sacrifice a portion of the profits and just want taxpayer funding with zero profit sharing.

    Once again let me emphasis the fact that those days are long gone, the Flames aren’t going to get taxpayer funding with 100% of the profits. They aren’t going to get it in Seattle, they aren’t going to get in Quebec City, they aren’t going to get it anywhere anymore, I hope the Flames realize this or it is going to be a painful process for them. That ship sailed with Edmonton, the Miami Marlins, etc. The political climate on that concept is changed for ever. Billionaires aren’t getting anymore “free money” for these private stadiums.

    • PrairieStew

      What would happen with McMahon if the Calgary Next proposal went forward – is it City land or University land ? That’s some pretty valuable property there that the City could profit from to offset making land available for the new development.

      • Bottsy777

        This is one of the things which makes it surprising to me that the City didn’t consider Calgary Next…. McMahon is University property (I believe.). The “big” problem with that is that the City desperately needs some of that land to fix the Crowchild Trail corridor. If the NEXT project went ahead – they could get rid of McMahon. The city could work with the University to acquire the land they need to fix Crowchild – and then the Uni/City could team together to create a Tech Hub/Mixed Use on those remaining lands…

      • McRib

        I believe the U of C owns McMahon on a sweetheart deal from McMahon himself, who privately built it with his own funds (what a crazy concept) and then he willed it I believe to the U of C.

        From what I have been told the reason the Stamps have never renovated it is the U of C always drags their feet and stops any purposals dead in their tracks. Don’t get me wrong we absolutely need to see a new Stampeders stadium as well in the next few years (along the C-Train line), but I just don’t think it has to be downtown in prime urban land. It is only used like I said max including the rare concert, Dino’s and High School Games 25-30 days a year.

    • Danomitee

      Okay 50% is too high for the city, but I honestly don’t think the Flames are that far off in what they’re asking. And they shouldn’t have to pay the city back.

      The city made the decision to put all of that money back into East Village. East Village was a complete @%#4hole a few years back and it’s starting to look better and better, but that was a ton of money invested into a dead area that the city decided to focus on.

      Now the city wants to shift their attention to Victoria Park, they want nothing to do with West Village because they’ve already invested all of their money on another part of the city so it would be shortsighted to pick up and move to another unfinished location. The Flames have some negotiating power here guys, if the city was already planning to renovate this area and are really only allowing the Flames to consider the same area they’re already in, then there should be some financial contribution to help them complete their plan.

      Or I don’t know they can go build another Airport road to nowhere for a billion dollars, which us as tax payers DID pay for and it didn’t get nearly as much flack as this project is getting right now. I agree the Flames kind of slapped us the fans in the face with their reaction this week, but what are they going to do? Both sides aren’t negotiating in good face, its a pissing contest.

    • OilFarmer

      I think one big difference between Calgary and Edmonton as well is that Edmonton’s downtown was such a mess and POS that using tax money to revitalize the area was viable. Calgary’s downtown core isn’t the same heaping pile of garbage that Edmonton’s was before the rink project.

      • Danomitee

        You’re definitely right, Edmonton needed that. The whole municipal airport really prevented businesses from flourishing there as well when you can’t build a skyscraper over 20 stories. But East Village was complete garbage, and Victoria Park still is.. The city wants to revamp these areas and we’re already paying taxes on it anyways so I think at least part of that loan should be rescinded. I’m probably in the minority though.

  • class1div1

    Exactly.Just trying to figure out why we arent hearing anything in regards to the politics of the Stampede board who obviously have much to gain or lose here.No one talks about them.Its like they are a secret society.

  • Backburner

    I wonder why there hasn’t been any major corporate sponsors throwing any money at this? 286 million would be pocket change for Scotiabank for example.. would that be something that the Flames ownership would be interested in?

    • CdnCzar

      A corporate investor would probably be interested in naming rights, what we should do is get Scotiabank to cough up $400-500 million for the next 20 years and loan against that to get the stadium built.

  • buts

    McRib , Calgary next so called football stadium was to be a fieldhouse with retractable seats. It is a multi-
    use fieldhouse that will get used almost everyday of the year. By the way the creosote is still leaking and our tax dollars WILL be used to clean that up.

  • Howedy

    I hope they stay in the Saddledome or leave. Screw it. The city doesn’t want an adequate indoor venue for more than several hundred people that’s on them. Without a major professional franchise or the ability to draw top-notch tours, the barren wasteland that is nightlife in Calgary gets even worse. The Flames don’t need Calgary. Calgary seems to favour Nenshi and his backward priorities. I guess they are fine with a lackluster downtown core, minimal entertainment options and a city that goes to sleep when the workday is over. Enjoy folks! In life, you have to pay to have nice things. Like blue rings and bike paths and traffic jams and more pedestrian bridges per capita than anywhere else in the world. Those things all cost lot’s of money to have. Calgary is on the right track for sure, let’s not ruin it with a new entertainment facility that most in the city will attend various events in. (facepalm)

    • dontcryWOLF

      That’s a very dramatic opinion. The nightlife of Calgary hinges on the city bowing to CSEC arena funding requests? …nobody here is saying don’t build a new arena. The debate revolves only around the cost sharing mechanism.

      I suppose the crux of this debate is whether or not an arena is a responsibility of public funding, like bridges or bike paths, or corporate funding, like ski resorts and movie theatres.

      Either way though, Calgary is doing just fine, and will continue to be fine. Call me a simple man, but I don’t even care that much going to see a game at an older building like the saddledome. I come for the hockey, not the overpriced beer that will double in price with a new building.

    • class1div1

      I can;t see the current city hall attracting any new business,let alone sustaining the present Pro sports .Acting like they have nothing to gain in all these negotiations is dishonest IMO. Calgary’s mayor shows disdain for rich people and it continues to get him in hot water.But,maybe it is what the people of Calgary want.We’ll find out soon enough.

    • class1div1

      I agree.Force both parties to put forth there best proposal within 2 weeks and put it on a yes/no ballot in this falls election.This group has been dysfunctional from the get go in negotiating a common ground that benefits everyone.

  • BringtheFire 2.0

    The ownership group behind the Flames has billions. We could build a 750 million dollar building-complex made of awesome and candy and have the Flames pay 500 million and the other 250 come from wherever.

    We must never forget the Great Reality: one per cent of the people, ninety nine percent of the wealth.

  • WilliPlett25

    Will the Flames open their books? If taxpayers are going to give you a crazy generous handout b/c you can’t afford 33% or 50% of the new rink cost, then open your books and prove you need this help. If you want all the profits from the new rink and no taxes, then open your books. I find it hard to believe that these Captains of Industry did not set aside a “new rink fund” years or decades ago. Or did they actually blow all their profits on all those bad free agent signings? Open your books.

    • Ludis Fanaticus

      Crazy thought here.
      I wonder what the reaction would be to the city saying, “your right, we want to be full partners. Lets negotiate our percentage ownership in your club.”
      Its never going to happen, of coarse.

  • Ludis Fanaticus

    Move our agenda to the front of the election discussion.
    Check

    Put the city on the defensive and force them to take action with our agenda.
    Check.

    Get the electorate motivated to give tacit consent to getting a deal done at taxpayer expense.
    Ch… ooops.

    I missed the start of the press conference with Mr. King, who I have met and is an able and engaging communicator. I have a lot of respect for him.

    However, today he sounded like someone representing a group trying to get ahead (literally and figuratively) of a press conference with the Mayor that is going to make their “push back from the negotiation table” look like what it is; Childish, manipulative, miscalculated and worthy of reeling back, as fast as you can.

    On the plus side, the Flames have managed to fast track this discussion.
    On the minus side, they have dragged this into the glare of the public eye and may have misread the desire of the citizenry to open their wallets.

  • Purple Hazze

    I see a few people on here today asking about the west village site, it should be noted that city’s environmental assessment, any remediation of the site is expected to take anywhere between 6-10 years, and that’s before they can start any construction. I’m pretty sure the Flames want to open their new rink in about 5 years so the west village wouldn’t work even if the cleanup costs were covered.

    • Kevin R

      Again, admittedly not knowing a whole heck of a lot on what this contamination really is, also being too lazy to research thoroughly on the internet (I probably will on the weekend drinking a bottle of wine) can the remediation not be accelerated & completed in a shorter period of time? I do get what you are saying, but I don’t recall anything from the Flames saying what kind of time frame they would want a new building up & operational. Maybe part of their mindset is if they go the West Village site it would take longer to be operational & that is a perceived cost to the Flames they would be willing to accept if the $$$ stake was reduced. I’m just guessing at that.

  • Anonymoustrollpolice

    I think Ken King thinks he is speaking to a class of 5th graders. He is incredibly fake when he speaks. I can’t believe the Flames owners would make him the front man of the organization. He is now doing more harm than good. That press conference was hard to watch. His smerky little smile after every sentence is sickening.

  • Intercourse the Penguins

    I do not think any new arena/entertainment complex should in a floodplain. Weather is only going to get more chaotic and higher ground is prudent for a PUBLICLY OWNED AND ( at least partially) PUBLICLY FUNDED new rink.

  • class1div1

    I agree.Force both parties to put forth there best proposal within 2 weeks and put it on a yes/no ballot in this falls election.This group has been dysfunctional from the get go in negotiating a common ground that benefits everyone.

    • BlueMoonNigel

      If the city and the Flames were really serious about getting the best deal done in the shortest amount of time, they would agree to have former PM Brian Mulroney brought in as a mediator and arbitrator. Back in his day at Iron Ore, Mulroney would lock management and the union in the room together and nobody got out until a deal was done that satisfied both parties. He did the same thing as PM. Brian Mulroney, Calgary needs you!

  • Flames fan since 83

    I’m curious to know if there is any rent? Or Property Tax?
    I know that in Edmonton, the Oilers put up about 125-140 million dollars up front. And they are Rent Free for 35 years. Basically paying their entire rent up front.

    • CdnCzar

      I believe King mentioned this as an option that the article above, when he mentioned “cash payment” in lieu of rent. If they have that kind of money up front, then they should put it towards to the construction rather then prepaid rent and a massive tax deduction.

  • MarbledBlueCheese

    I’m a fan of this 50-50 approach, as I assume that government will then pay for 50% of my business building as well, no strings attached. After all, the public uses it.

    • supra steve

      And they will pay for the land, all community upgrades required (roads, interchanges, C-train station relocation, etc.), and will require you to pay zero property tax. It’s the standard city of CGY deal for any business.

      • freethe flames

        Don’t you know they are entitled to it. It’s called externalization of cost. Public opinion is starting to turn against big business and the rich hording their money while the rest of us go further into debt.

  • shaner

    The thing I don’t get, is this veiled threat to move! To where? honestly where are they going to move that’s better than a city over a million that pays (I’m guessing) top 10 ticket prices and sells out there barn 40+ times a year in a ticket revenue driven league?
    Quebec? and what have more eastern imbalance?
    Seattle???? seriously, what all of a sudden being a tenant in someone else’s building (not be built by tax dollars) where you wouldn’t even be top draw in that building (behind NBA team) never mind the city(Seahawks, mariners)
    Kansas City?…..yah thats a hockey hotbed dying to support some Canadian team
    I would bet that Florida, Carolina and prob Arizona’s owners would envy Calgarys CURRENT situation over the one they have with a newer arena and little revenue (FANS) to fill them

    I love hockey and the (Oilers) and Im pumped for Calgary having a great new facility but as I was in Edmonton, just don’t think its right to expect the public to fund billionaires…….especially when all that happens is ticket prices increase to an already ridiculously expensive entertainment option.